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Gaps Between IT and the Business Hinder Transformation

Josh Greenbaum has been working in and around IT for more than three decades as a programmer, systems analyst, author, consultant and analyst. He notes there has always been some tension between the IT group and their colleagues on the business side, though it’s never been as extreme as it is during the current transformation.

A recent survey by Transform to Better Perform found a large percentage of business executives think their IT teams lack the innovative capacity needed to drive their companies forward. About 15 percent of the respondents gave the IT team a “poor” rating.

IT needs its own digital transformation, to be honest. The older models of both technology and business training are dead and should have been buried long ago.

“I think it’s gotten worse, not better, because consumerization of technology has made line-of-business managers much more savvy about what could be possible from technology,” said Greenbaum, who leads Enterprise Applications Consulting and is well-known for his blog EMatters. “They’re asking IT the question, “Why can’t my enterprise applications be as easy to use as my iPhone.”

Some industry observers contacted through the Transform initiative went so far as to say they think some business leaders may know more about cloud-based technologies than the IT team members, but Greenbaum isn’t among them. “I don’t think they’re more savvy. I think they think they’re more savvy,” he joked. “To say they’re more savvy is to give them a little more credit for knowing how to translate that desire into reality than perhaps they deserve. “

Greenbaum credits today’s business managers with having a vision, but it’s a vision that isn’t always easy to realize as they may think it is. “Once you bring in the – let’s be honest – the adult supervision that IT should and can provide, a simple request turns into a rather complex problem that can’t be solved by finding a cool new app,” he said.

IT leader trying to up his or her game would do well to read a new report from the Transform to Better Perform initiatives, entitled Accelerating Business Transformation Through IT Innovation, said Kevin Leahy, Group General Manager for Data Center Solutions at Dimension Data. As part of the research, business executives were asked about the business impacts of IT, how they interact with IT and who’s really driving that change.

“Their voices send clear messages about the importance of technology in providing agility, speed, and innovation, and about their frustration with the pace at which their IT groups are embracing modern technologies,” said Leahy. “They also suggest the need for a new scorecard to use in evaluating the performance of enterprise IT departments.”

What happens when IT is brought in too late? Greenbaum noted the case of a B2B supplier that wanted to shift to an e-commerce business model. The business managers hoped to reduce their 45-day sales cycle to about a week. “They said, ‘If we can close these deals and get these things going, we can get paid faster.’ And everyone got very excited,” Greenbaum said. “Then the VP of supply chain raised his hand and asked, ‘Well, what am I going to do? Because my supply chain is geared to a 45-day fulfillment.’”

The lesson here is that companies can’t speed up their business from six weeks to one week simply by tweaking the front end. “You can’t do that by having a new app,” said Greenbaum. But there are a lot of business executives who think they can.

To a certain extent, some SaaS vendors may be partly to blame as they promote solutions to business executives who may have a limited understanding of what it will take to integrate those services to the back-end. “Their chances of overselling, or selling incorrectly, are very high,” said Greenbaum. And this is leading to what the consultant called a “cloud silo problem” in which business executives add new apps that cannot be integrated.

“These [SaaS] guys are very, very good at that. In fact, the whole business model is to bypass IT. They’ll say ‘You don’t need IT. This is cloud, just come and get it,’” said Greenbaum. “And if there’s no IT policy prohibiting it or requiring a review, then, yeah, it just proliferates. And now you’ve got 80 siloed cloud apps.”

Going back to the supply chain example, he said a “real digital transformation” would require the IT team to work with procurement, supply chain and talent management to assure all the different systems are communicating flawlessly. “And if you’ve siloed them in the cloud or on premises, you’re in trouble because it becomes a very difficult thing to integrate them,” said Greenbaum.

Even getting the IT team involved earlier in the process isn’t a perfect solution because there are substantial gaps between the IT skills used to maintain legacy systems and those needed to build and integrate new applications.

“IT needs its own digital transformation, to be honest. The older models of both technology and business training are dead and should have been buried long ago,” laughed Greenbaum. “I think it’s also a money issue. If you want to do digital transformation, you’ve got to pay for it. I think there has to be a slight change of the mindset about what IT talent gets paid and, in fact, how you allocate resources in IT.”

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“The fact is, business transformation is a talent and a skill desert, unfortunately. It’s that way at the service provider level, at the vendor level and at the IT level,” said Greenbaum. “Everybody is struggling to find the human capital need to do this.”

The solution to the problem often comes down to improved communications. Greenbaum advises clients to remember that technology should be purchased the same way it is consumed – not just by the line of business or even the CIO. He says, “We’re talking really about having multiple conversations simultaneously that are more meaningful than what we’ve had before.”

Contributors

Contributor

Josh GreenbaumPrincipalEnterprise Applications Consulting

Joshua Greenbaum has over 30 years of experience in the industry as a computer programmer, systems analyst, author, consultant, and industry analyst. He has helped pioneer coverage of the enterprise software market in the late 1980s – following now-defunct companies like D&B and Cullinet, as well as the likes of Apple, Hewlett-Packard, IBM, Microsoft, Oracle, Sybase, among many others – he moved to Europe in 1991 and worked as an industry analyst and as European correspondent for Information Week and other industry publications. It was during this European tenure that Josh wrote the first technical analysis of SAP’s R/3 enterprise software suite, a move that helped establish him as a leading expert in the market. He founded Enterprise Applications Consulting in 1998 and have been a pioneering independent analyst and consultant ever since.